SRC-SLL S.B. 932 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 932
By: Sibley
Economic Development
3-27-97
As Filed


DIGEST 

Currently, the Texas Department of Commerce, the lead agency for the
state's economic development and tourism efforts, is governed by a policy
board whose members are appointed by the governor.  The executive director
of the Department of Commerce is also appointed by the governor.  The
Department of Commerce has undergone numerous changes in structure and
focus since its inception in 1987.  This bill will abolish the Department
of Commerce and create the Texas Department of Economic Development and
Tourism, replace the policy board with a governing board that has the
authority to hire an executive director, provide for the privatization of
certain economic development programs and services, and require the agency
to upgrade its current business information and referral program. 

PURPOSE

As proposed, S.B. 932 abolishes the Department of Commerce and creates the
Texas Department of Economic Development and Tourism, replaces the policy
board with a governing board that has the authority to hire an executive
director, provides for the privatization of certain economic development
programs and services, and requires the agency to upgrade its current
business information and referral program. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the governing board of the Texas
Department of Economic Development and Tourism in SECTIONS 8, 9, 10, 14,
33, and 34 (Sections 481.0043(d), 481.0044(a), 481.005(d), 481.012(d),
481.153, 481.157(b), Government Code) and to the Texas Department of
Economic Development and Tourism in SECTION 29 (Section 481.075(a),
Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends the heading to Chapter 481, Government Code, as follows:

CHAPTER 481.  New heading: TEXAS DEPARTMENT OF ECONOMIC DEVELOPMENT AND
TOURISM 

SECTION 2. Amends Section 481.001, Government Code, to redefine "governing
board" and "department," and to delete the definition of "border region." 

SECTION 3. Amends Section 481.002, Government Code, to provide that the
Texas Department of Economic Development and Tourism (department), rather
than the Texas Department of Commerce, is an agency of the state. 

SECTION 4. Amends Section 481.003, Government Code, to make a conforming
change. 

SECTION 5. Amends Section 481.004, Government Code, as follows:

Sec.  481.004.  New heading: GOVERNING BOARD.  Provides that the governing
board (board), rather than the policy board, is composed of nine public
members.  Deletes existing text regarding ex officio members of the board.
Requires at least one member of the board  to be a resident of a county
with a population of less than 200,000, rather than 30,000; at least one
other member to have experience in international trade; at least one other
member to have experience in small business; and at least one other member
to have experience in tourism.  Makes conforming changes. 

SECTION 6. Amends Section 481.0041, Government Code, as follows:

Sec.  481.0041.  New heading: REMOVAL OF GOVERNING BOARD MEMBERS.  Makes
conforming changes. 

SECTION 7. Amends Sections 481.0042(a), (b), and (e), Government Code, to
make conforming and nonsubstantive changes. 

SECTION 8. Amends Section 481.0043, Government Code, to make conforming
changes. 

SECTION 9. Amends Section 481.0044, Government Code, to require a report
on the department's activities to include certain information. Deletes
existing text regarding recommendations to be made by the policy board.
Makes conforming changes. 

SECTION 10. Amends Section 481.005, Government Code, as follows:

Sec.  481.005.  New heading: EXECUTIVE DIRECTOR; GOVERNING BOARD DUTIES.
Requires the board to employ an executive director of the department
(executive director) who serves at the pleasure of the the board.  Deletes
text regarding appointment by the governor of an executive director who
serves a two-year term.  Requires the executive director to have
demonstrated experience in the areas of economic development or tourism,
rather than executive and organizational ability.  Requires the executive
director to manage the affairs of the department under the direction of
the board.  Requires the members of the board to direct the activities of
the department and, in performing that duty, to take certain actions.
Deletes existing text regarding the relationship of the policy board with
the department and the executive director. 

SECTION 11. Amends Section 481.006(a), Government Code, to require the
board, rather than the executive director, to establish the divisions
within the department, which may include an information and referral
division, a business development division, rather than a domestic business
development division, and a international trade division, rather than a
business development division.  Deletes a reference to a job training
division.  Makes nonsubstantive changes. 

SECTION 12. Amends Section 481.007, Government Code, as follows:

Sec.  481.007.  New heading: ADVISORY COMMITTEES.  Makes conforming
changes. 

SECTION 13. Amends Sections 481.010(a), (b), and (c), Government Code, to
make conforming changes. 

SECTION 14. Amends Sections 481.012(c) and (d), Government Code, to make
conforming changes. 

SECTION 15. Amends Section 481.022, Government Code, to set forth the
general duties of the department.  Deletes existing text regarding
attracting and locating new businesses, encouraging the growth and
expansion of existing businesses, working with local governments and
organizations, and emphasizing rural economic development.  Deletes
existing text regarding actions to be taken by the department to carry out
its duties. 

SECTION 16. Amends Section 481.023, Government Code, to require the
department to perform the administrative duties, rather than the
administrative duties formerly assigned to the Texas Economic Development
Commission, prescribed under certain programs.  Requires the department to
administer certain funds.  Deletes existing text regarding the Texas
Department of Community Affairs and assistance for businesses or
industries seeking employment training, retraining, or  manpower
development. 

SECTION 17. Amends Sections 481.024(a) and (f), Government Code, to make
conforming changes. 

SECTION 18. Amends Section 481.028(b), Government Code, to require the
department to enter into an agreement with the Texas Workforce Commission
regarding the job training programs financed by the skills development
fund.  Deletes the provisions requiring the department to enter into
agreements with the Texas Higher Education Coordinating Board, the Central
Education Agency, the Texas Department of Human Services, and institutions
of higher education. 

SECTION 19. Amends Section 481.029, Government Code, to require the
department to recover the cost of providing publications and services,
rather than direct technical assistance and management training services,
to businesses and communities when reasonable and practical.  Makes
conforming and nonsubstantive changes. 

SECTION 20. Amends Chapter 481C, Government Code, as follows:

SUBCHAPTER C.  New heading: TEXAS STRATEGIC ECONOMIC DEVELOPMENT PLANNING
COMMISSION 

Sec.  481.0301.  DEFINITION.  Defines "commission."

Sec.  481.031.  New heading: COMMISSION.  Sets forth the composition of
the Texas Strategic Economic Development Planning Commission (commission).
Deletes existing text regarding findings made by the legislature regarding
the state's economy.  Requires the commission to elect a presiding officer
and an assistant presiding officer.  Deletes existing text regarding the
policy of this state on economic development.  Sets forth duties of and
compensation for the commission.  Provides that an affirmative vote of a
majority of the entire membership of the commission is necessary for an
action of the commission. 

Sec.  481.032.  New heading: DUTIES OF COMMISSION.  Sets forth duties of
the commission.  Deletes the provisions regarding diversifying and
developing the economy, evaluation of the performance of existing state
economic development efforts, review of economic policy recommendations,
undertaking specialized studies and preparing specialized reports, and
conducting a biennial review of economic development activities.  Makes
conforming changes. 

Sec.  481.033.  New heading: STRATEGIC PLAN.  Requires the commission to
submit to certain persons, before December 1, 1998, a strategic plan for
economic development. Requires a copy of the strategic plan to also be
distributed to other state agencies that impact the economic development
of the state.  Requires the department to provide oversight for the
implementation of the strategic plan.  Deletes existing text regarding
recommendations by the department for policies and programs. 

Sec.  481.034.  ABOLITION OF COMMISSION.  Provides that the Texas
Strategic Economic Development Policy Commission is abolished and this
subchapter expires December 1, 1998. 

SECTION 21. Amends the heading to Chapter 481D, Government Code, as
follows: 

SUBCHAPTER D.  New heading: INTERNATIONAL TRADE

SECTION 22. Amends Section 481.041, Government Code, to delete references
to financing and the international market for products and services.
Makes a nonsubstantive change. 

SECTION 23. Amends Section 481.043, Government Code, as follows:

Sec.  481.043.  New heading: GENERAL POWERS AND DUTIES RELATING TO
INTERNATIONAL TRADE.  Requires the department to take certain actions
relating to international trade.  Deletes existing text regarding the
department's duties in regards to international trade. 

SECTION 24. Amends Section 481.059(a), Government Code, to delete a
reference to guarantee fees.  Deletes references to bonds. 

SECTION 25. Amends the heading to Chapter 481E, Government Code, as
follows: 

SUBCHAPTER E.  New heading: BUSINESS DEVELOPMENT--GENERAL PROVISIONS

SECTION 26. Amends Section 481.071, Government Code, to provide that the
legislature finds that the department should target high-wage, high-skill
employment opportunities and should actively seek private funding to
supplement the department's marketing and advertising efforts.  Deletes
existing text regarding the economic growth of the state and the securing
and retaining of private business enterprises. 

SECTION 27. Amends Chapter 481E, Government Code, by adding Section
481.0725, as follows:  

Sec.  481.0725.  GENERAL POWERS AND DUTIES.  Sets forth the powers and
duties of the department. 

SECTION 28. Amends Section 481.073(b), Government Code, to make a
conforming change. 

SECTION 29. Amends Section 481.075(a), Government Code, to make conforming
changes. 

SECTION 30. Amends Section 481.077, Government Code, by adding Subsection
(f), to require the department to transfer the Statewide Certified
Development Corporation to the private sector not later than September 1,
1999.  Requires the department to submit a report to the legislature and
the comptroller detailing the plan for the transfer not later than
December 1, 1997. 

SECTION 31. Amends the heading to Chapter 481H, Government Code, as
follows: 

SUBCHAPTER H.  New heading: BUSINESS DEVELOPMENT--PERMIT ASSISTANCE

SECTION 32. Amends the heading to Chapter 481J, Government Code, as
follows:  

SUBCHAPTER J.  New heading: BUSINESS DEVELOPMENT--SMART JOBS FUND PROGRAM

SECTION 33. Amends Section 481.153, Government Code, make a conforming
change. 

SECTION 34. Amends Section 481.157(b), Government Code, to make a
conforming change. 

SECTION 35. Amends Section 481.172, Government Code, to set forth the
duties of the department. Deletes existing text regarding certain duties. 

SECTION 36. Amends the heading to Chapter 481N, Government Code, as
follows: 

SUBCHAPTER N.  New heading: BUSINESS DEVELOPMENT--LINKED DEPOSIT PROGRAM

SECTION 37. Amends Chapter 481, Government Code, by adding Subchapters K
and P, as follows: 

SUBCHAPTER K.  INFORMATION AND REFERRAL

Sec.  481.166.  LEGISLATIVE FINDINGS.  Provides that the legislature makes
certain findings regarding economic development and state agencies. 

 Sec.  481.167.  TEXAS BUSINESS AND COMMUNITY ECONOMIC DEVELOPMENT
CLEARINGHOUSE.  Requires the department to establish the Texas Business
and Community Economic Development Clearinghouse (clearinghouse) to
provide assistance to businesses and communities in the state through the
use of a statewide toll-free telephone service.  Requires the
clearinghouse to collect and disseminate certain information.  Requires
the clearinghouse to develop and establish a user-friendly database for
all relevant programs that is accessible through the Internet.  Requires
the department to obtain from other state agencies appropriate information
needed by the department to carry out its duties under this subchapter.
Requires the comptroller to assist the department in furthering the
purposes of this chapter by allowing the department to use the field
offices and personnel of the comptroller to disseminate certain
information useful to businesses in the state. 

SUBCHAPTER P.  RESEARCH AND DATA SERVICES

Sec.  481.211.  POWERS AND DUTIES.  Requires the department to compile,
develop, and research certain economic information. 

Sec.  481.212.  COMPILATION AND DISTRIBUTION OF DATA AND RESEARCH.
Requires the department to obtain from other state agencies and
organizations businessrelated statistics and data in order to serve as a
one-stop center for business-related information.  Requires the department
to create a web site to publish business-related information on the
Internet in order to maximize the accessibility of business-related data. 

SECTION 38. Amends Chapter 484, Government Code, as follows:

CHAPTER 484.  TEXAS MANUFACTURING INSTITUTE

Sec.  484.001.  ESTABLISHMENT.  Requires the Texas Manufacturing Institute
(institute) to be established as a nonprofit corporation to carry out the
purposes of this chapter.  Deletes existing text providing that the
institute consists of entities involved in the promotion of manufacturing,
that join as members of the institute. 

Sec.  484.002.  DUTIES.  Makes conforming changes. 

Sec.  484.003.  New heading: GOVERNING BOARD.  Sets forth provisions for
the creation of a governing board of the institute.  Deletes existing text
regarding the policy board. 

Sec.  484.004.  New heading: CONFIDENTIALITY.  Provides that information
collected by the institute relating to a product or process, the
application or use of a product, or other technological and scientific
information is confidential and not subject to disclosure.  Deletes
existing text regarding the technical advisory council. 

Sec.  484.005.  PUBLIC AND PRIVATE FUNDS.  Makes no change.

Sec.  484.006.  New heading: IMMUNITY FROM LIABILITY.  Provides that a
member of the governing board or any other person acting on behalf of the
institute in executing a contract, commitment, or agreement under this
chapter is not personally liable for the contents of the contract,
commitment, or agreement.  Deletes existing text regarding disbursement of
funds by the policy board. 

Sec.  484.007.  New heading: TRANSFER TO PRIVATE SECTOR.  Requires the
governing board to submit a plan for transferring the institute to the
private sector to certain persons not later than December 1, 1997.
Requires the transfer of the institute to the private sector to be
complete not later than September 1, 1999.  Deletes existing text
regarding staffing. 

SECTION 39. (a) Repealer:  Sections 481.0075, 481.026, 481.042, 481.044,
481.046, 481.048481.058, 481.060, 481.061, 481.074, and 481.078,
Government Code (Texas-Mexico Authority, Literacy, Definitions, Powers and
Duties Relating to Financing, Honorary Commercial Attache Program, Program
Rules, Tax Exemption; Exempt Securities, Conflicts of Interest, Personal
Liability  of Members of Persons Acting on Behalf of Department, Revenue
Bonds Authorized, Bond Sale and Issuance, Agreements in Bonds, Refunding
Bonds, Bond Proceeds; Funds, Tax Exemption, Obligations as Legal
Investments for Fiduciaries, Electronic Data Base, Compact Exploration
With the United Mexican States, Bonds, and Major Employer Development
Programs). 

(b) Repealer: Subchapters F, G, I, M, O, Q, R, S, T, U, V, X, AND Y,
Chapter 481, Government Code (Rural Economic Development, Small Business
Assistance, State and Local Permits, Data Depository, Main Street Program,
Development of Products, Small Business Incubators, Shared Foreign Sales
Corporations, Indemnification in Connection with Art and Artifacts,
Product Commercialization, Small Business Innovation Research,
International Trade Commission, At Risk Youth and Dropouts). 

(c) Repealer: Chapter 481AA, Government Code (Workforce Development
Incentive for Youth; Recycling Market Development). 

SECTION 40. (a) Effective date: September 1, 1997.

(b) Provides that the Texas Department of Commerce is abolished and its
powers and duties are transferred to the Texas Department of Economic
Development and Tourism.  Provides that a reference in law to the Texas
Department of Commerce means the Texas Department of Economic Development
and Tourism. 

(c) Sets forth procedures for appointing members to the Texas Department
of Economic Development and Tourism. 

(d)  Authorizes the person appointed to perform the duties of executive
director of the Texas Department of Commerce abolished by this Act to
continue to perform those duties and complete the term of office
established under the prior law governing the authority of the executive
director, and the prior law is continued in effect for that purpose. 


(e)  Authorizes the governor or the person appointed by the governor to be
the presiding officer of the governing board of the Texas Department of
Economic Development and Tourism to designate a person to perform certain
ministerial duties. 

(f) Provides that the Texas Department of Economic Development and Tourism
has all the powers and duties provided by law and all the property, funds,
rules, employees, unspent appropriations, documents, rights, and
obligations of the abolished Texas Department of Commerce, except to the
extent the laws governing the Texas Department of Commerce's powers and
duties are amended by this Act. 

(g)  Provides for the continuation of the rules, policies, and procedures
of the Texas Department of Commerce until superseded by a rule or other
appropriate action of the Texas Department of Economic Development and
Tourism. 

(h) Provides that the validity of a rule, form, or procedure adopted,
contract or acquisition made, proceeding begun, obligation incurred, right
accrued, or other action taken by or in connection with the authority of
the Texas Department of Commerce before it is abolished under Subsection
(b) of this section is not affected by this Act.  Provides that to the
extent those actions continue to have any effect on or after September 1,
1997, they are considered to be the actions of the Texas Department of
Economic Development and Tourism. 

SECTION 41. Emergency clause.